Answer to Question #48041 in Microeconomics for Ieva

2014-10-19T23:05:28-0400

Question #48041

Suppose that the production function for iPods is Q = 20K0.5L0.5. The marginal product of labour is 10(K/L)0.5, and the marginal product of capital is 10(L/K)0.5.Suppose that labour can be hired for $6, and capital can be hired for $9. When the firm is producing 49 units at lowest cost, what will the firm’s marginal rate of technical substitution be?